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WSB auto loan

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Brain dump

Which market is the asset exposed to?
Fraud numbers
Quality of loan
Changes in credit rating?
Derivative products?
Over leveraged consumer financials?
What's the likelihood of consumers with auto loans defaulting due to corona?
Which loans takes precedence? Mortgage, student or auto?
Has there been any increases in fraud numbers (relative to increase of written loans), this would indicate that lenders has become more careless of credit assessment.
If fraud numbers has increased, how has this then impacted credit ratings?
What's the current rate of defaults?
What are auto loans priced in at?
Age distribution of creditors

Short should be made on the loans, not companies if it can be avoided
There were 113 million open auto loan accounts in the United States in the third quarter of 2018, up from 81.4 million in early 2010, a 39 percent increase.
Currently, 85 percent of all new car purchases in the United States are financed, up from 75 percent in 2009. In addition, 53 percent of all used car purchases are financed, up from 46 percent in 2009.
Americans owed $1.26 trillion on auto loans in the third quarter of 2018, an increase of 75 percent since the end of 2009.
The amount of auto loans outstanding is equivalent to 5.5 percent of GDP — a higher level than at any time in history other than the period between the 2001 and 2007 recessions.

Auto loan debt held by American's rose to a record $1.2 trillion at the start of the year 2020.
Auto loans now make up nearly 10% of all household debt, the third largest debt category behind mortgages and student loans.
While auto loan debt continues to rise, the percentage of delinquent borrowers remains at a lower than average level and auto sales remains strong - for now. Investopedia
Auto are more liquid than houses, takes less time to sell a car than a house, therefore there's less time for the asset to be on the books without earning any interest. However, if push comes to shove, there's going to be a lot of consumers that's gonna default on their loans. This means that even though that cars are liquid, a fire sale will likely start, as a result price of the underlying asset will decrease (by how much?).
Cheap credit and strong employment undoubtedly helped more Americans buy cars last quarter. But as interest rates increase, consumers with variable-rate credit card debt might see their credit card payments rise, which could make it harder for them to make their auto payments. Higher interest rates are also likely to mean less borrowing unless wages go up significantly to allow borrowers to afford the higher monthly payments.
Not only did the total amount of auto loans increase, but the total number of originations, or new loans, increased as well. The New York Fed described it as “the highest annual auto loan origination volume observed in [our] data.” Peak times for people to take out auto loans are March, May and August. In March 2005, Americans took out 2 million auto loans; in March 2019, 2.5 million.
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